Bank of England hold interest rates at record lows


Yesterday, the Bank of England (BoE) voted unanimously to hold interest rates at record lows of 0.1%. Much like the United States Federal Reserve, the BoE held a dovish tone despite bond yields reaching record highs. It stated it “does not intend to tighten monetary policy at least until there is clear evidence that significant progress is being made in eliminating spare capacity and achieving the 2% inflation target sustainably.” 

The BoE also acknowledged the UK’s rapid vaccine rollout as being a driver of expectations for a rebound in economic activity, as well as the improved global picture. Should this continue and the economy begins to beat expectations in the coming weeks, the next BoE meeting could paint a very different picture. For now, however, the message is clear and, as most analysts predicted, the BoE have no intention of increasing interest rates anytime soon.


France is now set for another month long lockdown as they struggle to combat rising Covid cases. This new lockdown may not be specific to France, however, as Germany and Italy are experiencing troubles of their own. Should this be the case, the outlook for the euro over the coming months is not a good one. The French regions being placed under further lockdown represent almost 40% of French GDP. Quite clearly, the impact on the economy will be large.

Furthermore, if Germany, the euro’s powerhouse, follows suit, economic data across the bloc will likely fail to meet expectations in the coming months. With this mind and EUR/GBP continuing to trend lower, it’s hard to see much of an upside for the euro in the near future.

A lack of urgency in vaccine approval has left the bloc in a state of despair. The European Medicines Agency (EMA) yesterday announced that the AstraZeneca vaccine was safe, as reports of blood-clotting had caused European countries to halt their rollout. President of the European Commission, Ursula von der Leyen previously stated that they would explore options to block shipments of vaccines out of the bloc unless they felt they have their “fair share”. In what seemed like a ploy to distract from the poor EU rollout, the EU are now faced with a lack of vaccinations for its population as both the EMA and WHO declare the vaccine safe. Tensions could rise between EU member states and the world if von der Leyen follows through on her threat. And while this is still just a threat, it will certainly be interesting to see how it plays out. 

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12:30pm – CAD retail Sales ex Autos (Mom)(Jan)